CRM Did It, Eventually

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Customer Relationship Management, or “CRM,” is a broad idea that was successfully marketed starting at the turn of the century…and then fell far short of everyone’s expectations. It’s useful now, but not in the ways any of its evangelists had hoped, and I wonder if business use of social media technologies will follow a somewhat similar path.

The idea of using technology to track customers is as old as the first bird feather dipped in ink to make lasting scratches on a vellum or parchment ledger. Automating it usually meant outsourcing the effort to someone other than yourself, and the collecting and integration of the information was solely decided by the individual upon whom such inglorious responsibility had been bestowed. It was considered bookkeeping for much of history and, as such, it was an activity that trailed the proactive efforts of operations and selling. A necessary cost of doing business.

The promise of CRM was to flip this model and use technology to literally manage customer relationships and thereby make money, often in real-time.

It was an abysmal failure. A variety of companies started aggressively selling lots of CRM products in the late 1990s, aided in part by widespread fear of Y2K (and thus perhaps the first layperson awareness of how important computer software could be?). More than $1 billion of it sat unused as of 2003, according to one report; another study said that less than 40% of participating companies had satisfactory end-user adoption rates. The adoption issue lingers, ranking first in a 2007 study of usage in the UK as the primary obstacle to implementation according to four-fifths of execs.

Duh. It turns out that the technology solution was easy, and it looked obviously so in the PowerPoint presentations that sold it. But the people issue — who would use it, why, how often, and with what obvious benefit to them — was all but ignored, mostly because the technologists selling the stuff could tell the difference between a real person and a character from an episode of Star Trek. They gave medical doctors with bad bedside manners a good name. I worked at a systems integrator during the CRM sell-in frenzy and I remember the “change management” portions of the software implementations that accounted for getting staff into a room to “train” them on how to live their lives according to a flowchart on a PowerPoint slide.

Worse, most clients balked at the training sessions anyway, as if they believed that buying CRM software was like installing a light switch that would magically work the moment it was flipped. Not.

Where CRM is making its comeback now is via people using its constituent parts to do better jobs at what they were already doing, and not learning entirely new ways to do the same old things. Production management. Workgroup collaboration. Behavioral analytics. Better forward-looking estimates. Even “social CRM,” which is a highfalutin way to saying that early awareness activities like funny YouTube videos should have some connection to sales down the road, and that it’s OK to track those connections. CRM involves lots of great tools that can help companies save money as well as make it.

But we know now that CRM could never “manage” customer relationships any more than roads “dictate” how you drive your car. It was and is glorified bookkeeping, which is saying a lot, actually, because there’s a lot of knowledge to be gained from knowing what you’re throwing at customers, when you throw it, and what they subsequently do with it. It’s just not a stand-in for the strategy and creativity required to populate those boxes on the process slide. And you can’t make people behave differently unless you give them really good reasons to do so. We know now that CRM stands for “Can’t Replace Marketing.”

I wonder if the future of social media looks somewhat similar? The differences are as striking as the similarities, of course, but you could say that we’re just finishing the frenetic sell-in phase, so consider this:

  • Every brand is using social media technologies in some way, usually in pursuit of the broadly expansive promises of the sellers of such stuff that it’ll “create conversations” and “manage engagement” with customers. Humm…already sounds sorta familiar.
  • With so much money spent on it, the call for more tangible results can already be heard, so the evangelists are doubling down and claiming that companies aren’t spending enough on social media, and that they need to do it better. Again, we’ve heard that refrain before, too.
  • The behavior-changing business continues to be dicey, also, to say the least: while most consumers happily report that they’re “on” social media a fair amount, they also say that they most trust people they know for input on making purchase decisions (and commensurately distrust corporate brands, many of which are active contributors to social media).
  • Further, much of the “social” in social media experiences is really viewership or consumption, and not a true peer-to-peer activity as the evangelists promise. So those behaviors aren’t changing either.

So perhaps what comes next are more limited, focused uses for social technologies — applied to various places within the brand-customer spectrum — where people need to talk to other people. All the magicspeak of Conversation as something new might dissolve, and get replaced by technologies that enhance and improve all the old practices of conversation that have existed since that first lonely bookkeeper entered an order for a suit of armor on his parchment ledger.

Again, lots of differences. But this technology adoption racket isn’t a new idea, any more than CRM or social media are. And if there’s on certain forecast, it’s that the future for social media won’t look anything like what we think it will look like. People will still be doing the same old things they’ve always done.

(Image credit: yeah, right)

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